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Updated over 11 years ago on . Most recent reply

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Justin Foster
  • Tacoma, WA
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How to figure out wholesaling fee?

Justin Foster
  • Tacoma, WA
Posted

How do I figure out what a good wholesaling price would be?

I'm in Missoula, Montana and I'm working with someone who did wholesaling for a year and charged $5,000. She's recommending that I do $3,000 in today's market.

But I keep hearing about people that wholesale for $10,000. I presume that this is in areas with higher demand, but it still makes me wonder how much I should be charging.

Most Popular Reply

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J Scott
  • Investor
  • Sarasota, FL
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J Scott
  • Investor
  • Sarasota, FL
ModeratorReplied
Originally posted by Chris Haas:
Should a good wholesale deal leave the buyer with margin of a normal 70% rule? 75%? No offense I think the question was worded kinda poorly but what I'm guessing he is asking, I also have trouble finding answers too.

It's not the wholesaler's job (or even within the wholesaler's ability) to determine how much equity should be left for the end-buyer. It's the end-buyer's job to determine this and for the wholesaler to figure out through either asking or through trial-and-error.

Some end-buyers would likely be happy with 75%. Some would rather have 65%. And some (like me), don't think in terms of percentage of ARV. If the wholesaler brings me a deal that's too thin, I'll tell him that -- and I may even tell him what I'm willing to pay. Hopefully, the wholesaler will learn how I value properties and what criteria I'm using so that in the future he will price the property appropriately (or not bring properties that won't work for me). He should be doing the same thing for every other buyer he works with.

Know your buyers, give them a deal that works for them, but no more than that. I can promise you that the end-buyers are looking out for their best interests -- you don't need to do it for them. You should be looking out for your best interests, which is maximizing your profit.

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